Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cas payments (excluding cash payments for loan principal and interest payments)

image text in transcribed
Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cas payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts $527,000 409,500 480,000 Cash payments $470,500 353,000 531,000 According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March (Negative balances and Loon repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March January February $ 40,000 $ 40,000 March Beginning cash balance Total cash available Preliminary cash balance Ending cash balance Loan balance $ 80,000 $ 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cas payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts $527,000 409,500 480,000 Cash payments $470,500 353,000 531,000 According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March (Negative balances and Loon repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March January February $ 40,000 $ 40,000 March Beginning cash balance Total cash available Preliminary cash balance Ending cash balance Loan balance $ 80,000 $ 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing and Assurance Services Understanding the Integrated Audit

Authors: Karen L. Hooks

1st edition

471726346, 978-0471726340

More Books

Students also viewed these Accounting questions

Question

How does cluster analysis help you easily identify those outliers?

Answered: 1 week ago